US P&C premium growth to slow in 2025, but profits to hold steady: Swiss Re

By Ashish Tiwari

July 18 - (The Insurer) - Growth in the U.S. property and casualty (P&C) insurance industry is expected to slow in 2025, Swiss Re Institute said in its latest outlook.

The outlook said that 2025 may see direct premiums written grow 5.5%, down from 9.6% last year. Growth is projected to ease further to 4% in 2026 as exposure gains moderate and competition intensifies.

However, despite the deceleration, industry profitability is expected to remain stable.

Swiss Re Institute sees return on equity at 10% for both 2025 and 2026, supported by steady investment income even as underwriting results weaken slightly. This is a slight decline from the 11% in 2024.

"The underwriting tailwinds that drove 2024 improvements, which were strong premium growth, easing inflation and low claims severity growth, are mostly past," Swiss Re Institute said.

"We see premium growth easing this year amidst rising competition, especially in commercial property and personal lines."

The combined ratio was 99% in the first quarter of 2025, a solid result despite the California wildfires and heavy storm losses.

However, rising capacity and rate pressure, particularly in commercial property, are expected to weigh on future underwriting margins.

Personal auto, the report states, will be a driver of industry improvement. "However, this line of business faces higher uncertainty in the second half as tariff uncertainty and its impact on the production supply chain remain unclear."

Swiss Re Institute forecasts P&C portfolio yields to rise to 4.0% this year and 4.2% in the next, up from 3.9% in 2024, driven by growing recurring investment income.

The report warned of potential shocks, including tariff-related claims costs and cost inflation in sectors such as personal auto.

“Sunny skies, but pack an umbrella,” the report cautioned.